Worrying increase in insolvency trends, warns debt charity

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​Money Advice Trust comments on Q3 Insolvency Statistics

The Insolvency Service has today (28 October 2016) published insolvency statistics from July to September 2016, which show that total individual insolvencies increased for the fifth consecutive quarter, driven primarily by an increase in individual voluntary arrangements (IVAs).

Jane Tully, director of external affairs of the Money Advice Trust, the charity that runs National Debtline, said:

“The steep increase in individual voluntary arrangements (IVAs) is in part a worrying consequence of the recent shake-up in the debt management market. We have concerns that poor regulation is resulting in unsuitable IVA products being sold to clients with low incomes.

“On a more positive note, welcome changes by the government to widen access to DROs and the improvement of the bankruptcy process appear to be taking effect, meaning more people can avail of the debt solutions. However, we are mindful that the figures published here are only the tip of the iceberg.

“Given the economic uncertainty in the current climate, rising prices and the long-term trend of an increase in consumer credit, our concern remains for the minority of households that are struggling financially or are relying on credit to make ends meet. If this is not sustainable long-term, there may be trouble ahead.

“We are therefore urging all borrowers to take stock of their household finances now – and to seek free advice from a charity-run service like National Debtline as early as possible to help address any issues.”

National Debtline offers free advice at www.nationaldebtline.org or on 0808 808 4000, Monday to Friday 9am to 8pm and Saturday 9.30am to 1pm.